Budget 2024

Full Budget 2024 presented today by finance minister Nirmala Sitharaman shows lot of promises as well as some disappointments.

Let us discuss the promises first-

• Agriculture research will be upgraded to improve productivity and developing climate resilient varieties.
• 1 Crores farmers across the country will be initiated to adopt natural farming, supported by certification and branding in the next 2 years.
• Digital Public Infrastructure (DPI) for coverage of farmers and their lands in 3 years.
• Digital crop survey in 400 districts.
• One month’s wage to new entrants in job market in all formal sectors in 3 installments up to Rs 15,000.
• Government will reimburse EPFO contributions of employers up to Rs 3000 per month for 2 years for all new hires.
• Setting up women hostels and creches in collaboration with industry to promote higher participation of women workforce.
• Loans up to Rs 7.5 Lakhs with a guarantee from the Government promoted fund.
• Special schemes for various development projects for eastern states especially for Bihar and Andhra Pradesh.
• Pradhan Mantri Janjatiya Yojna for improving the socio-economic condition of the tribal community.
• Credit guarantee scheme for the MSME sector. Mudra loan increased from Rs 10 Lakhs to Rs 20 lakhs.
• Twelve Industrial parks will be developed.
• Rental housing with dormitory type accommodation for industrial workers will be developed under PPP model.
• Scheme for providing internship opportunities in 500 top companies to 1 Crores youth in 5 years with an allowance of Rs 5000 per month along with Rs 6000 one-time assistance.
• Encouraging states to lower stamp duty along with plan to lower the stamp duty on new property owned by women.
• Promote water supply, sewage treatment and solid waste management projects and services for 100 large cities.
• Rs 10 Lakhs Cores will be provided for PM Awas Yojna 2.0.
• Setting up Bharat Small Reactors and newer technologies for nuclear energy.
• Provision of Rs 11,11,111 Crores for Infrastructure (3.4% of GDP). Additionally, Rs 1.5 lakh Crores interest free loans to states to support resource allocation.
• Emphasis on tourism with special attention on Bihar and Odisha.
• Private sector driven research and innovation at commercial scale with a financial pool of Rs 1 lakh Crore.
• Venture capital fund of Rs 1000 Crores to promote Space Economy.
• Custom duty reduction on certain medicines, mobile phone, mobile PCBA, Charger, Gold& Silver.
• Fully exempt custom duty on 25 critical minerals.

Now comes the disappointing part-

• Short Term Capital Gain is increased from 15% to 20%.
• Long Term Capital gain is increased from 10% to 12.5%.
• No tax slab change in the Old Tax Regime. Some additional tax benefit in the New Tax Regime to make it a preferred choice. There is clear message of the Government to move to New Tax Regime.
• Old Tax Regime encourages long term savings and investments. Its downgrading is disappointing for small investors.

So, overall, a mix bag for the investors. While proposed investments in various sectors should spur growth momentum of the economy, but dampener for investors was increase in the capital gain tax especially Long-Term Capital Gain Tax. But with the continued focus on infrastructure coupled with fiscal prudence augurs well for the market after a short blip.

But as the economic survey has highlighted the concern of unabated stock market price appreciation, it’s time to revisit your asset allocation and continue your own investment prudence.

Manoj Pandey

CFP
Mainstream Investments Services Pvt Ltd